wear and tear insurance
When a vehicle is leased, the lessee must purchase the wear and tear insurance to protect the new car from damage during the lease period. Wear and tear can occur during any time period and the new car or leased vehicle is at risk during each of those times. Damage due to storm, vandalism, or flood may be covered by the rental company but may not always be covered by the lease agreement. If damage occurs during the rental period, it is wise to purchase the damage insurance to protect the new car.
What Is Included In Wear And Tear Insurance
There are several types of damage covered by a wear and tear policy including: normal wear and tear, unforeseen wear and tear, and manufacturing defects. If there are any damages caused as a result of a vehicle accidents or mechanical defect, the lessee will be fully protected under the lease protection plan. Although any damage that occurred during the time of the lease would normally be covered under the car owner’s policy, in most cases a leasing company will offer additional coverage for such damages. It is important to carefully read the fine print of the lease agreement prior to signing the agreement to determine what damages will be covered. Another type of damage covered by a lease protection plan is excess wear and tear. This is damage that has occurred while the vehicle was under a lease but was returned to the owner prior to the expiration of the lease term. This is another situation in which the new owner would have complete control of all expenses relating to the return of the leased vehicle.
Damage to the interior or exterior of the vehicle is normally covered by a normal wear and tear policy. Typical examples of this type of damage would include chipped paint, dirty locks, or dents. Although the motor vehicle insurance would usually cover accidents or damages to the vehicle caused by a third party, the lease agreement typically provides coverage for such occurrences as normal wear and tear. This is why it is often recommended to include such incidents on the policy that accompanies the auto lease.
The final type of insurance policy, to discuss with an agent relates to residual value. Residual value is designed to cover the value of the leased vehicle as soon as the lease ends and the new owner has full rights to utilize the vehicle. Usually, a residual value clause is included with the purchase agreement of a vehicle that is leased, but it is also common for the lessee to include such clauses when taking out the lease in the first place. The important thing to keep in mind is that the value of the leased automobile is only partially covered by the agreement if it is older than six months after the termination of the lease agreement.
Wear and tear policies provide peace of mind for those who are involved in business where vehicles are leased. In today’s economic climate many businesses are finding it difficult to absorb the additional expense associated with leasing cars and the associated repair bills. It is important for those who lease cars to understand their legal rights and to take action if they feel they are being mistreated. If the leasing agreement states something to the contrary, it may be possible for you to seek damages for pain and suffering, or wrongful destruction of property. Whichever the case, it is important to remember that if your car is damaged in a collision or it is totally wrecked it is not your responsibility to repair it at your expense. Take action now before it is too late!